US online retail giant, Amazon is leading a $575 million investment in Deliveroo, buying a slice of the fast-growing startup, as it makes its way into the European food and groceries business, according to Bloomberg/the national.
In an emailed statement, Deliveroo mentioned that the round G funding round will be joined by existing backers including T Row Price, Fidelity Management and Research, and Greenoaks. So far, Deliveroo has raised $1.53 billion to date and will be receiving a cash infusion to expand its operations and compete against other food delivery platforms including Just Eat and Uber.
It’s worth noting that Just Eat dropped nearly 11% – their biggest drop since March 2018. On the other hand, Takeaway.com dropped to 6.5%, while Delivery was only down at 4%.
Amazon has signaled its interest in food with Prime Now – a platform that offers deliveries to major British cities within two hours. However, domestic competition is quite rough, as there are other existing platforms such as Ocado Group, an online grocery pioneer that licenses its technology, and Krogen that aims to halve that time with their service Zoom.
There have also been some heated consolidations in the food delivery sector as Takeaway.com agreed to acquire German businesses of Delivery Hero for approximately $1 billion n December.
In addition, Uber was in early talks to buy food-delivery company Deliveroo, Bloomberg reported in September.
Uber Eats and Deliveroo are also battling for so-called virtual restaurants, where eateries lease kitchen space to prepare food for couriers. With no dining rooms or wait staff, these outfits pop up where food delivery companies expect demand and sell their meals through Uber Eats or Deliveroo’s app.
Deliveroo said the new funding will partly go towards new innovations in the food sector, for example through delivery-only kitchens, as well as new formats.
Amazon closed down its UK food delivery service late last year. The investment is one of the US giant’s rare forays into the region. In 2010 3i Group sold BuyVIP.com, private online shopping club, to Amazon for $96.50m.
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